Support from the European Union for small and medium enterprises in Mongolia is becoming increasingly significant.
“Micro, small, and medium enterprises (MSMEs) show that sustainable development is not just a concept, but a real way to address economic challenges,” noted the European Union.
The first steps toward a sustainable future can start with simple questions: “How can we save water?” or “How can we reduce costs?”. These reflections inspired Batbayar Khatambaatar, the founder of Iromik LLC, a small chili oil production company. His company, striving for process improvement, has become one of the pioneers of the circular economy in Mongolia. Numerous MSMEs demonstrate how effective resource use and waste-free production can help solve economic problems.
Thanks to the “Switching to a Green Economy” (SOGE) project, implemented with the support of the organization People in Need and other partners such as the Mongolia Sustainable Finance Association, Development Solutions, and Caritas Czech Republic, as well as funded by the EU's SWITCH-Asia program, small businesses are becoming role models in resource conservation and low-carbon economy.
Batbayar's factory is located on the outskirts of Ulaanbaatar, where the lights in the corridors turn on only when there is movement. Smart sockets allow monitoring of electricity consumption through a mobile app, and cardboard packaging is neatly prepared for recycling.
“We didn’t know what green production or a circular economy was before,” he said. “Now it is part of our everyday process.” Looking at the insulated walls, he added: “I believe that by 2030 we will be able to heat the building entirely with renewable energy sources. Our company can become a model for other small and medium enterprises, a kind of green laboratory.”
The Importance of Green Support
Iromik LLC is among 23 small and medium enterprises receiving individual consultations and audit preparation from SOGE. The project helps Mongolian enterprises implement circular economy principles, reduce emissions, and develop the first national eco-labeling system that meets international standards. Over the past three years, the project has reached nearly 1800 MSMEs, helping them apply sustainable design practices, minimize waste, and use resources efficiently.
When Iromik LLC joined the SOGE green transition program, Batbayar became a participant and won a grant. “We didn’t do anything special,” he recalled, “but we listened to the advice and invested in insulation.” The funds were used to insulate the factory with a 10-centimeter layer of high-density foam. “Small producers often don’t think about this,” he noted. “But it changed everything: heat loss decreased, energy consumption reduced, and the workspace became more comfortable.”
Additionally, he received support from SOGE technical specialists who assisted with documentation, energy monitoring, and audit preparation. “We didn’t even know what soil degradation assessment or heavy metal content was,” he added. “Now we understand what it means and how to measure it.”
From Theory to Practice
In Ulaanbaatar, Oyuunchimeg Davaa from Magic Foods LLC runs a small enterprise that smells of freshly baked cookies. “I didn’t want my research to stay on paper,” she shared. “While studying wild berries in Mongolia, I realized that the skins and seeds, which are usually discarded, have great nutritional value.”
Her company processes these by-products, which are usually discarded after juice or oil extraction, into cookies rich in antioxidants, omega-7, and folic acid.
“We create functional products from ingredients that would otherwise end up as waste,” she explained.
Like Iromik, Magic Foods also receives support from SOGE. “Last spring, we took third place in one of the competitions and received a grant, which we used to purchase special equipment—a seed and husk separator. There are only two such machines in Mongolia,” Oyuunchimeg said.
New equipment allows her to separate and reuse every part of the berry with virtually no waste. The cookie production process requires minimal water—only 1–5 liters a day for cleaning, and the oven consumes less energy than standard industrial models. Thanks to SOGE, Oyuunchimeg was able to exchange experiences with other MSME representatives, which became a valuable lesson in resource management and collaboration opportunities.
A Growing Movement
Both entrepreneurs represent a growing movement among small businesses that demonstrate that sustainable development can be both practical and profitable. Currently, Batbayar and Oyuunchimeg are undergoing an audit for environmental, social, and governance (ESG) compliance, which will be the next step toward implementing circular economy principles in Mongolia.
It is important to note that Mongolia has become one of the first countries to implement an independent ESG assessment system, which is a significant step toward ensuring transparency in sustainable development reporting.
For Iromik, certification will be a confirmation of years of efforts to modernize production according to international standards. “If consumers start recognizing the ESG label,” says Batbayar, “they will understand that by buying from local producers, they are also supporting ecology and improving life in their community.”
For Magic Foods, obtaining certification will create export opportunities. “We are preparing to enter the Chinese and Japanese markets,” Oyuunchimeg added. “With certification, we will be able to prove that products from Mongolia are competitive on a global level.”
“The European Union is proud to support Mongolia's commitment to green growth through projects like SOGE,” noted EU Ambassador to Mongolia Ms. Ina Marcijulienite. “Providing MSMEs with opportunities to implement sustainable production methods and eco-labeling brings the country closer to a resource-efficient circular economy.”
Connecting Local Initiatives with National Goals
The SOGE project collaborates with the “Sustainable Plastic Recycling in Mongolia” (SPRIM) initiative, also supported by the EU SWITCH-Asia program, to improve waste management and recycling systems in the country. Together, they are shaping a low-carbon circular economy, enhancing business standards and community engagement.
“There are over 80,000 enterprises in Mongolia,” said Ms. Enkhzatsral Namkhaiijantsan, project manager of SOGE at People in Need. “If everyone takes small steps, such as saving energy and reducing waste, it will lead to significant changes.”
Batbayar is already taking such steps. “We recycle waste, save electricity, and plan to use solar energy,” he noted. For Oyuunchimeg, each cookie is an example of how waste can become valuable resources when viewed from a different perspective. For both participants, SOGE has provided the necessary tools and confidence for sustainable development.
As Batbayar said: “Good deeds are worth promoting.”
Tatar S. Maydar
source: MiddleAsianNews
